116% Returns in Only 5 Hours? Peanuts!

By Wayne Mulligan, on Thursday, September 18, 2014

Have you ever doubled your money...

In just a few hours?

Last week, in one of this year’s most successful IPOs, a group of investors made 116% on their money in a little over 5 hours.

But there was a second group of investors that did even better:

Trading in the same stock, on the same day, this second group made 381%.

Let’s see how they did it...

Are IPOs Always This Profitable?

It might be tempting to think that investing at the IPO is always this profitable. We’ve all heard stories about stocks soaring on IPO day.

But statistically speaking, that’s not the case.

In fact, according to a recent study conducted by the University of Florida, over the last decade the average first-day returns for IPOs was just 12.2%.

Which makes last week’s IPO all the more impressive.

ReWalk Robotics (NASDAQ: RWLK) began trading a little after 11 AM last Friday, September 12th at $11.80 per share.

By the time the market closed, the stock had more than doubled, trading at $25.60 per share.

Investors that bought ReWalk at the open made a fantastic return...

But it paled in comparison to the 381% the second group of investors earned.

381% Returns... And Higher

Actually, as I write this article – with ReWalk trading at roughly $36 per share – their gains are even more impressive...

They’re sitting on profits of 536%.

How is that possible?

Well, it’s because this second group of investors owned the stock at a far lower price than the folks who purchased it on IPO day.

Instead of owning shares at $11.80, these investors owned it $6.72.

Let me explain...

Private Stock Market

As you may have guessed by now, the second group of investors got into ReWalk before the company went public. They invested while the company was still privately held.

That’s what allowed them to see returns of 300% to 500% while everyone else was sitting on much smaller gains.

Those might be typical returns for professional early-stage investors, like venture capitalists. But most individuals never see returns like that on an IPO.

The remarkable thing about ReWalk is that the VCs weren’t the only ones to make 381% on IPO day...

Regular investors – people just like you – were able to get the same returns.

You see, ReWalk recently raised money on one of the high-quality equity crowdfunding platforms we cover here at Crowdability: OurCrowd.com.

In fact, they were featured on OurCrowd only 14 months ago. So if you were an early Crowdability reader, you might have seen ReWalk and had the chance to invest...

And taken part in a 536% gain in only 14 months.

High Potential Opportunities

It’s news and returns like this that make us so excited about early-stage investing, and more specifically, equity crowdfunding.

Once the laws are finalized, all investors, regardless of income and net worth, will have the ability to invest in high-potential, private companies like ReWalk...

And hopefully see similar returns.

Happy Investing!

Best Regards,
Wayne Mulligan
Wayne Mulligan


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Tags: Equity Crowdfunding Ourcrowd Early-stage Investing Title III IPO Profits Rewalk

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